Recovering From Destroyed Credit
If you have destroyed your credit due to credit card debt, late payments, repossessions or foreclosures, it doesn’t necessarily mean the end of obtaining credit. Even if you have a bankruptcy on record, obtaining new credit with lower limits is possible. Other options help repair credit as well. Raise your credit score out of the ashes by taking some responsible actions that don’t take years.
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Smaller Credit Cards
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Rebuild your credit reputation by obtaining a small gas station card or a card from a department store. Just ask for one at a store or gas station and the business will sign you up. Use one of these to prove yourself by paying bills regularly and raise your credit score. Some department-store cards, however, are not reporting to the credit bureaus. Ask the company during signup so that you are sure it is reporting.
Use a Secured Card
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Ask for a secured credit card from your bank as another easy method of credit repair. These involve placing money into your savings account for determination of a credit limit. The card is “secured” due to your depositing your own money up front. Pay your bill on time every month for credit-score improvement. After a period of time of on-time payments, banks also raise the credit limit.
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Paying Other Bills
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Pay any existing debts or bills if you have the finances necessary. Even on-time payments of payday loans or a mortgage go on your financial record. Focus on paying any other long-standing debts -- or old credit card debts. Create a better financial picture with these actions before obtaining and using credit more responsibly again.
Check for Credit Errors
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Remove any errors about your past credit as an additional method toward credit improvement. The Federal Trade Commission says you have rights in fixing your credit reports through the Fair Credit Reporting Act. Write a dispute letter to any consumer-reporting company if you have proof of errors. Include copies of all documents proving your case. By law, an investigation of your case must take place within 30 days. Always check your credit score from the credit bureaus. It is available for free once a year.
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